Inland, Steelworkers Hammer Out Pact

Union Wins High-level Involvement

May 28, 1993|By John N. Maclean.

Inland Steel Industries and the United Steelworkers of America Thursday reached a tentative six-year labor contract that would base most further employee cuts on attrition, liberalize work rules and tie employee compensation more to profitability.

The agreement also would involve the union at the company's high levels, a controversial element that already has scuttled talks between the union and another steelmaker. While the company and union were withholding details, it appears the company has agreed to have a non-union board member represent the union point of view.

This would not mean simply nominating someone already on the board, such as Arnold Weber, president of Northwestern University and now an Inland board member, who has been involved with labor negotiations in the past. Instead, it would involve having someone like Weber, a highly regarded corporate officer, nominated to sit on the board and represent labor views.

The union and company leadership expressed satisfaction with the accord, hammered out in 12 weeks of talks well in advance of a July 31 deadline for the expiration of the current four-year contract. The pact still must be ratified by union members.

Inland officials said the agreement would mean an uninterrupted supply of steel for its customers. Inland has been booking orders at more than 100 percent of the company's capacity, partly due to hedging by steel customers who anticipated an impasse with the union.

The company declined to comment on specifics of the accord, pending notification of union members about its contents.

It appeared, however, a breakthrough came in negotiations when the union agreed that its demand for representation on the board of directors could be met by having a non-union board member represent union views. Talks between the union and U.S. Steel Group broke down this spring when U.S. Steel declined to have a union member on its board.

The Inland agreement has been billed as the pattern for other steelmakers. In addition to Inland, contracts expire July 31 at National Steel Corp., Bethlehem Steel Corp. and Armco Inc., covering about 40,000 workers in all. A contract with U.S. Steel Group involving an additional 14,000 union members expires next year.

Jack Parton, District 31 director for the union, acknowledged other steelmakers may have difficulty matching Inland on the question of union participation in the company. But he said he was hopeful further talks, using the Inland agreement as a pattern, could reach the same conclusion.

Parton said new union involvement will go further than the board of directors.

"There will be union involvement at all levels of the company, from the top to the bottom," Parton said.

As an example, he said Maurice Nelson, president of Inland Steel Co., the operating unit, had promised designated union members direct access to himself, as though they were vice presidents. But Parton said Nelson made it clear the final decisions still belong to management.

Parton quoted Nelson as saying that like vice presidents, union members would have a 49 percent say while he, Nelson, would have a 51 percent say.

Parton said the No. 1 priority for union members is job security, especially in light of the ongoing layoffs at Inland's Habor Works. Inland has eliminated 1,545 positions, or 8 percent of it work force, in the past year, as part of a companywide restructuring. It intends to reduce employment eventually by a total of 3,500.

Parton said the union has won the right to have further jobs eliminated only by attrition unless there are unusual circumstances, such as discontinuing an entire department. Further, the union will be consulted about each job targeted, Parton said.

In return, he said the union had granted Inland more flexibility on work rules, a key to increased productivity. He said the assurances by the company about job security made it possible to be more lenient about work rules, which are seen by union members as a form of job security.

Also, he acknowledged the union had made "economic" concessions. Inland has tried to tie worker compensation more to profitability. The company has a profit-sharing program, but has not made a profit for three years.

At the annual stockholders meeting Wednesday, Robert J. Darnall, chairman and chief executive officer, predicted the company will return to profitability this year.